Opinion: At Greek bailout talks, arrogance and ignorance held sway

Greece’s former finance minister says Germany bullied the country into accepting austerity measures

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Former Greek Finance Minister Yanis Varoufakis: ‘You put forward an argument that you’ve really worked on, to make sure it’s logically coherent, and you’re just faced with blank stares. … You might as well have sung the Swedish national anthem.’

The European Union ministers never had any real intention of negotiating a new deal and have just spent the past five months making the Greeks run around in circles and tie themselves in knots, Yanis Varoufakis added.

It should surprise no one that German stock prices jumped 2% on Monday after the terms of Greece’s capitulation became known, while the best current indicator of Greek stock prices, the Global X FTSE Greece 20 exchange traded fund
GREK, -0.84%
slumped nearly 5%.

The moves leave German stock indices within a whisker of their all-time highs — and the implied level of the Athens stock market within a whisker of new lows.

The latest Greek “bailout” leaves Germany the complete masters of the European Union, and shows how far they have left behind the Good German era of the embarrassing.

Varoufakis’ interview with the New Statesman is explosive for his description of how power is actually wielded inside the cloistered halls of the European Commission.

It exposes a system that is stunning in its arrogance, cynicism — and ignorance.

You couldn’t talk economics to the other members of the Eurogroup, the ousted finance minister says. “There was point-blank refusal to engage in economic arguments,” he told The New Statesman’s Harry Lambert. “Point blank. You put forward an argument that you’ve really worked on, to make sure it’s logically coherent, and you’re just faced with blank stares. … You might as well have sung the Swedish national anthem.”

Perhaps this is no surprise. Few politicians are original thinkers. As a breed, they get ahead by going along with the crowd. They are generally junkies for groupthink and conventional wisdom.

Maybe the most horrifying revelation in Varoufakis’ account is the arrogant attitude of the European ruling elite toward democracy and the rights of the public. In January, the Greek people elected a new government specifically dedicated to a policy of ending the five-year policy of austerity. A little over a week ago the Greeks voted by an overwhelming majority in a referendum to reject austerity.

Yet the European leaders in the negotiations just didn’t care, Varoufakis says. They insisted budget negotiations trumped any mere election results. “So at that point, I said, ‘Well, perhaps we should simply not hold elections anymore for indebted countries,’ ” he recalls, “and there was no answer.”

Greece’s capitulation in its talks is a triumph of unreason over reason. Tsipras, the prime minister, has given in to herd mentality, fear-mongering, false data, bad logic and the flawed tyranny of sunk costs. He was apparently terrified his country would “run out of money,” even though money is whatever you say it is.

Greeks are currently limited to bank withdrawals of 60 euros ($66) a day due to the crisis. Meanwhile, according to the World Gold Council, the country’s government is still sitting on 112 tonnes of gold bullion reserves — worth 1,400 euros per household at current exchange rates. If you can’t use them in a time like this, what are they for?

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